The mayor is back today with a new letter released to the city employees (and one presumes, the Chronicle) about his plans to continue underfunding the civilian employee pensions.
May 23, 2007
To: City of Houston employees
From: Mayor Bill WhiteYou probably have been following the public discussion in recent days of the City of Houston Municipal Employees Pension Plan (HMEPS). I know that it can be complicated and I appreciate and understand your concern about pensions benefits. So, let me share some simple facts with you.
The municipal employees’ pension plan is healthier than it has been in years, as are the pension plans for Police and Fire. Keeping pension benefits secure is a very important issue for me — today and tomorrow.
As we negotiate with the HMEPS Board, I do not intend for you to lose any benefit you have earned.
In 2004 we agreed with the HMEPS Board to make a schedule of substantial annual contributions. Those agreed upon contributions were $66 million in Fiscal Year 2005, $69 million in FY ’06 and $72 million in FY ’07. That equates to about 15.8% of City payroll.
Prior to the agreement, from 2001 through 2003, the City’s contribution was 10% of payroll. During Fiscal 2004, also before the agreement was reached, it was 14.7%. So, under the agreement we have increased both the annual dollar amounts and the percentage of payroll contributed to the pension fund.
In addition, I offered and the Pension Board accepted a $300 million interest-bearing note secured by a lien on one of the most valuable buildings in Houston, the Hilton Americas Hotel. We have fulfilled those obligations.
Both parties agreed that we would discuss the City’s contribution beginning July 1, 2007, after we had evaluated the progress we made since 2004 in reducing the unfunded liability of the pension fund. Since the changes in 2004, we have cut the unfunded liability in half. That’s real progress in three years. We expect to come to an agreement soon that continues this kind of progress and makes your pension fund even more secure.
Meanwhile, I repeat, municipal pensions are secure. I am dedicated to keeping them that way.
Bill White,
Mayor
I find this statement the most interesting: “I do not intend for you to lose any benefit you have earned.” (Emphasis added.)
My first reaction is that he intends to be in the governor’s mansion before the pension goes broke, so he can shed crocodile tears and claim he did everything he could to save the program. The second thing that occurs to me is that his definition of “lose” as applied to city employees doesn’t appear to include “be forced to give up what we were promised.” Given his earlier statements about offering the “option” of retirement packages with less money, and that I can’t imagine anyone volunteering to accept less, his definition of “lose” seems at odds with “keep,” as in promises, and “obey,” as in the law that dictates the city’s contribution.
Thoughts and comments?
